Waller's September Rate Hike Doubts Send Markets Reeling

US Federal Reserve Governor Christopher Waller has suggested that interest rates may remain steady in September. He cited 'slow but continued progress' toward the Fed's goal of 2% inflation, urging markets to give disinflation a chance.

In a statement, Waller emphasized that inflationary effects from tariffs and war-related energy spikes are temporary and fading. This view is shared by New York Fed President John Williams, who noted that there's no clear sign yet whether existing policy will bring inflation down to target.

Markets rallied in response to these comments, with global bond yields dipping. The market odds of a September rate hike fell to 50% from previous highs, following Fed Chair Kevin Warsh's hawkish speech at Jackson Hole.